"Today, the first and perhaps the only duty of the philosopher is to defend man against himself: to defend man against that extraordinary temptation toward inhumanity to which - almost without being aware of it - so many human beings today have yielded."
Gabriel Marcel

26 June 2015

The Bucket Shop on the Hudson was quiet in this day after precious metal options expiration.

There was intraday commentary here about China's desire to make the yuan a global reserve currency, and some possible implications for gold from the head of Bloomberg precious metals analysis. You may read about that here.

The capping in gold and silver was continuing.

The open interest in silver is now over a billion ounces. This is greater than all annual mine production in the world. As it comes with falling prices, it is most likely initiated by the bears, and is 'undeliverable' at these prices from a purely practical standpoint.

How it resolves will be another matter. But the fact that it exists, apparently unexamined and largely unremarked, is one of the reasons why I refer to the US Precious Metals Futures market as The Bucket Shop. If this does end badly, and the analysts, regulators, and exchanges dare to say 'we could not see it coming,' then we might want to nominate them for the next Oscar awards.

We will see the end of the quarter next week, a holiday weekend in the US for the Fourth of July, and another Non-Farm Payrolls Report on Thursday, July 2.

Many eyes will be on the Greek debt situation as the June 30 deadline for payment to the IMF approaches.

“After five months of hard negotiations our partners, unfortunately, ended up making a proposal that was an ultimatum towards Greeks democracy and the Greek people. An ultimatum at odds with the founding principles and values of Europe. The values of our common European construction. We have been presented with an ultimatum, and it is the historic responsibility of our country and people to answer this ultimatum.”

Le Propriétaire

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Need Little - Want Less - Love More

The Banks must be restrained, and the financial system reformed, with balance restored to the economy, before there can be any sustainable recovery.

"In the Incarnation the whole human race recovers the dignity of the image of God. Thereafter, any attack even on the least of men is an attack on Christ, who took on the form of man, and in his own Person restored the image of God in all. Through our relationship with the Incarnation, we recover our true humanity, and at the same time are delivered from that perverse individualism which is the consequence of sin, and recover our solidarity with all mankind." Dietrich Bonhoeffer

"A credibility trap is when the managerial functions of a society have been sufficiently compromised by corruption so that the leadership cannot reform, or even honestly address, the problems of that system without implicating a broad swath of the powerful, including themselves.

The moneyed interests and their aspirants tolerate the corruption because they have profited from it, and would like to continue to do so. Discipline is maintained by various forms of soft financial rewards and career and social coercion."

These are personal observations about the economy and the markets. In providing information, I hope this allows you to make your own decisions in an informed manner, even if it is from learning by my mistakes, which are many. As a standing policy I never provide individual investment advice to anyone. I will only occasionally disclose my personal positions for purposes of illustration. Understand that my own circumstances could differ greatly from your own, and therefore what is suitable for me may not be suitable for you. My comments are intended to be reflection on general macro financial and economic events and trends.